U.S. energy firms this week added the most oil rigs since March, boosting the oil and gas rig count for the first time in four weeks, energy services firm Baker Hughes said in its closely followed report on Friday.
The oil and gas rig count, an early indicator of future output, rose three to 622 in the week to Oct. 13.
Despite this week’s rig increase, Baker Hughes said the total count was still down 147, or 19%, below this time last year.
Oil rigs rose by four to 501 this week, while gas rigs fell by one to 117.
U.S. oil futures were up about 8% so far this year after gaining about 7% in 2022. U.S. gas futures, meanwhile, have plunged about 28% so far this year after rising about 20% last year.
Exxon Mobil agreed to buy U.S. rival Pioneer Natural Resources in an all-stock deal valued at $59.5 billion that would make it the biggest producer in the Permian basin, the largest U.S. oilfield.
If Exxon wants to increase production in the Permian, it would likely have to add to the roughly 37 rigs that the combined Exxon-Pioneer currently have operating, according to analysts at energy consulting firm Tudor Pickering Holt & Co.
But, analysts at East Daley Analytics, another energy consultant, noted that so far the recent consolidation trend “is slowing rig activity in the Permian Basin.”
U.S. drillers have cut the rig count this year but despite this, crude production last week hit a record 13.2 million barrels per day, topping the previous peak set in March 2020 before the coronavirus pandemic decimated global oil demand, government data showed.
Higher prices for oil put U.S. crude production on track to rise from 11.9 million barrels per day (bpd) in 2022 to 12.9 million bpd in 2023 and 13.1 million bpd in 2024, according to U.S. Energy Information Administration (EIA) projections in October. That compares with a record 12.3 million bpd in 2019.
Despite lower prices for gas, U.S. gas production was on track to rise from a record 99.6 billion cubic feet per day (bcfd) in 2022 to 103.7 bcfd in 2023 and 105.1 bcfd in 2024, according to EIA’s projections in October.
(Reporting by Scott DiSavino Editing by Marguerita Choy)